Meeting of the International Grains Council Brussels, 5 December
London, 5-6 June 2017

Members of the International Grains Council (IGC) convened for the 46th Council Session in Brussels, on 5 December 2017. The meeting was chaired by Ms. Silke Boger, Head of Unit, DG Agriculture and Rural Development, European Commission. The latest supply and demand outlook and market developments for grains, rice and oilseeds were assessed (based on GMR 483), while recent changes in national policies and administrative matters were considered.

World total grains (wheat and coarse grains) production was forecast at 2,079m t in 2017/18, second only to the previous season’s record. Much of the 54m t y/y (year-on-year) decline in output is tied to a reduction for maize (-39m), although wheat (-5m), barley (-7m) and sorghum (-2m) crops were also expected to be smaller. Consumption was predicted to surpass 2.1bn t for the first time and including new peaks for food, feed and industrial uses. Amid smaller availabilities and record usage, world total grains stocks were predicted to tighten for the first time since 2012/13, dropping by 28m t y/y, primarily because of a fall for maize. Despite a potential pullback in wheat, barley and sorghum flows, larger maize shipments were seen lifting grains trade for a fifth consecutive year, to 359m t.

Winter wheat seeding in the northern hemisphere planting was well advanced by early December, with the preliminary forecast for world 2018/19 all-wheat harvested area showing little y/y change. Despite some concerns about dryness in some growers, crop conditions were reported to be mostly favourable ahead of the winter.

Mainly reflecting prospects for smaller crops in Asia, world rice production in 2017/18 was projected to retreat by 1% y/y, to 482m t, albeit still the second largest outturn on record. With global use seen little changed y/y, end-season carryovers were expected to fall slightly, to 121m t, as a reduction in the major exporters – tied to contractions in India, Thailand, the USA and Vietnam – was only partly offset by nominal accumulation in China. After the current calendar year’s sharp rise on big deliveries to Asia and Africa, trade in 2018 was predicted to decline marginally but, at about 43m t, would be historically high.

Despite prospects for a record harvested area, global soyabean output in 2017/18 was forecast to edge lower, to 348m t, on an anticipated retreat in yields, most notably in Brazil and the USA. With consumption expected to grow further on firm demand from feed sectors spanning livestock, poultry and aquaculture, aggregate inventories were set to tighten, by 9% y/y, to 41m t. Within the total, major exporters’ reserves were anticipated to be down by nearly one-fifth as a potential increase in the USA was outweighed by falls in Argentina and Brazil. Boosted by China’s needs, world trade was seen rising by 4%, to a peak of 153m t.

The IGC Grains and Oilseeds Index (GOI) was only modestly above year earlier levels, with advances for wheat, barley and rice just about offsetting declines for maize and soyabeans. Despite ample overall availabilities, average wheat prices were firmer amid relatively tight milling grade supplies. A well-supplied market has resulted in slightly softer maize values y/y, with exporters competing hard for available business. Despite being highly volatile at times, soyabean quotations were modestly weaker y/y, mainly on supply-side pressure, outweighing underlying support from firm international demand. Largely linked to demand-led gains in the first half of 2017, rice export values were around 15% higher y/y. The Council also noted strength in world freight markets, with the Baltic Dry Index rising by 27% y/y, including increases across all constituent segments.

The Council considered administrative matters, including an update on progress with its economic work programme. The Secretariat presented its five-year baseline projections of supply and demand for wheat, maize (corn), rice and soyabeans (covering the period to 2022/23)1.

Mr. Gary Martin, President of the IGTC provided an update on the current developments in policy and trade practice. The Council received statements from the FAO, on recent developments, and welcomed the participation of Taipei (Chinese) Separate Customs Territory as an observer.

The Council appointed Mr. Arnaud Petit (EU-France), currently Director of Commodities and Trade at Copa-Cogeca, Brussels as the next Executive Director of the International Grains Council, with effect from 1 February 2018.